India's inflation rises to 0.71% in November as decline in food, fuel prices loses steam

Inflation Trends - India's consumer inflation rose to 0.71% in November, up from an all-time low of 0.25% in the previous month, aligning with estimates of a 0.70% increase in the consumer price index [1][2] - The increase in inflation was attributed to higher prices for vegetables, eggs, meat, fish, spices, and fuel, with fuel and light prices rising 2.32% in November compared to 1.98% in October [2] Monetary Policy - The Reserve Bank of India cut its policy rates by 25 basis points, aiming to support economic growth amid a low inflation environment [3] - The central bank projects consumer inflation at 2% for the fiscal year ending March 2026, a decrease from the previous forecast of 2.6% [3] - The RBI's monetary policy meeting indicated a continued focus on supporting growth, with Governor Sanjay Malhotra emphasizing a proactive approach to meet the economy's productive requirements [4] Economic Outlook - HSBC Research suggested that weaker growth, prolonged low inflation, and tight fiscal policy may necessitate supportive monetary policy in 2026 [5] - Exports to the U.S., which constitute about 2% of India's GDP, have seen a decline, with a significant drop of 8.5% in October, leading to concerns about job losses in labor-intensive sectors [6][7] - The Indian rupee has been trading at record lows against the dollar, falling below the 90-rupee-per-dollar mark, amid declining exports and lack of trade agreements with the U.S. [7]